Invalda INVL, one of the Baltic region's leading asset management groups, had consolidated equity capital of EUR 47.9 million, or EUR 4.09 per share, at the end of the first quarter of 2016, which is a 0.4% decrease from the start of the year. The Invalda INVL group had a consolidated loss of EUR 0.2 million in the first quarter, compared with a net profit of EUR 1.2 million in the same period of 2015.
"The first-quarter loss was due to a reduction in the value of some investments and to the changes being implemented in the main asset management business. Ongoing operations and the plans of the companies we've invested in provide reason to expect that 2016 will be successful," said Darius Sulnis, the president of Invalda INVL.
Asset management business
Invalda INVL's asset management companies INVL Asset Management in Lithuanian and Latvia, the wealth-management financial brokerage firm INVL Finasta, and the administrative company INVL Farmland Management had EUR 340.6 million assets under management at the end of March 2016, or 3.8% more than at the end of 2015 (EUR 328.2 million). The number of clients increased by 0.8% during the quarter to 168,100.
The revenue of Invalda INVL group companies from asset management and administration activities increased 25% during the first quarter of 2016 to EUR 1.0 million; they had losses of EUR 0.1 million. Investments in the asset management business at the end of first quarter totalled EUR 7.1 million.
"The main tasks foreseen for 2016 are basically going as planned, and we expect that the main asset management business will become profitable in the fourth quarter," Sulnis said.
Investments
Investments in related companies
The value of Invalda INVL's investments in INVL Technology, in which it holds a 15.65% stake, was EUR 3.6 million at the end of March 2016, while the recognized loss from the change in value of the company's shares was EUR 0.3 million.
"INVL Technology recently completed acquisitions of Lithuania's Algoritmu Sistemos and Estonia's Andmevara. We believe the transactions are good for shareholders and expect the companies to grow in value during 2016," Sulnis said.
Invalda INVL's investments in the shares of INVL Baltic Real Estate (of which it owned 32.1% at the end of the quarter) had a gain of EUR 0.3 million during the first quarter. In early March 2016, INVL Baltic Real Estate, a real estate investment company, completed a 9 million-euro offering of new shares in which Invalda INVL acquired shares of EUR 6.2 million and increased its stake in the company to 32.1%.
"INVL Baltic Real Estate has begun reforms at the recently acquired Vilnius Gates complex. We think this project and other works that are underway will positively impact the company's value and future cash flows," Sulnis said.
Agriculture
The value of Invalda INVL's investments in the Baltic agribusiness company Litagra, in which it has a 36.9% stake, was EUR 14.3 million at the end of March 2016, which is 3.9% less than at the end of the year.
"Due to the low milk prices, we're experiencing losses in the primary agricultural production business, and this resulted the overall decrease in Litagra's value. Happily, the farmer services and grain trading business is performing better, which partially offsets the poorer results in dairy production," Sulnis said.
Banking
Invalda INVL holds a 6.79% equity stake in Siauliu Bankas, the value of which increased by EUR 0.7 million during the quarter to EUR 7.1 million.
"We're happy with Siauliu Bankas's record results and the growth," said Darius Sulnis, who has also been elected as a member of the Supervisory Council of Siauliu Bankas.
Facility management
Companies of the Inservis facility management group, which Invalda INVL controls, had a total value of EUR 4.3 million at the end of the first quarter of 2016, or 8.9% less than at the end of 2015 due to a negative change in value of EUR 0.4 million during the quarter.
"We're actively looking for acquisitions in the facility management segment and seek to create a serious alternative to the market leader," Sulnis said.
Other investments
As of the end of March 2016, Invalda INVL had EUR 0.58 million of investments in other publicly traded shares as well as EUR 1.6 million of other investments and loans. Invalda INVL had total liabilities of EUR 0.9 million at the end of March.
Invalda INVL AB, operating since 1991, is one of the leading asset management groups in the Baltic countries. Group companies in Lithuania and Latvia manage more than 20 mutual, real estate and pension funds (2nd and 3rd pillar), alternative investments, individual portfolios, private equity and other financial instruments. The group's companies manage over EUR 300 million of assets entrusted to them by more than 150,000 clients in Lithuania and Latvia as well as international investors. The shares of Invalda INVL have traded on the Nasdaq Baltic securities exchange since 1995.